December 7, 2018 / 1:05 PM / 3 days ago

UPDATE 1-Poland's finance minister says banks are safe as turmoil surrounds regulator

(Adds context about investigations at financial regulator)

WARSAW, Dec 7 (Reuters) - Poland’s finance minister said on Friday the banking sector is stable and deposits are safe as prosecutors brought charges against a second former head of the financial regulator in one month.

On Thursday, Poland’s national prosecutor’s office said it arrested seven ex-employees of the country’s financial regulator, including a former head. Another former head of regulator KNF, Marek Chrzanowski, was charged in late November with corruption, though he denies any wrongdoing.

“The stability of the finance sector is an absolute priority. The financial system and the banking system show stability. Poles’ deposits are safe,” Finance minister Teresa Czerwinska told a press conference.

Polish shares fell in November when Chrzanowski resigned over corruption allegations made by the owner of Getin Noble Bank Leszek Czarnecki.

Czarnecki accused Chrzanowski of demanding payments of millions of dollars to a lawyer for “support”. Polish prosecutors have been investigating allegations of corruption tied to the case.

The ex-employees arrested on Thursday face charges tied to their failure to carry out their responsibilities in their roles at the regulator, the national prosecutor’s office said on Friday.

Their actions could have led to the loss of 1.5 billion zlotys between 2013 and 2014, according to the charges, the office added.

Reporting by Pawel Florkiewicz; Writing by Joanna Plucinska and Agnieszka Barteczko; Editing by Andrew Heavens and Elaine Hardcastle

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